AdviceIQ Articles

  • Obama IRA Cap’s Downside

    Submitted by Rick Kahler on Tue, 04/23/2013 - 12:00pm

    The Obama Administration’s plan to cap tax-favored retirement accounts puts a ceiling of around $3 million on IRAs and other investment vehicles. If enacted, it likely will curb how well people – not just the ultra-rich – can retire.

  • Japan’s Rally: A Bubble?

    Submitted by Mark J. Foley a... on Tue, 04/23/2013 - 9:00am

    Japan has the hottest stock market in the world today, but it may be wise to sit this rally out at this point. The central bank-fueled surge on Japanese equities feels like the heady days of the dot-com era. We have a hard time identifying real value in many Japanese companies today, and see no way for Japan to get out of its economic slump by printing money.

  • Lessons From the Penney Mess

    Submitted by Yale Bock on Mon, 04/22/2013 - 3:00pm

    The J.C. Penney fiasco shows how the retail business is an investor's graveyard. The recent ouster of chief executive officer Ron Johnson after just 17 months at the helm doesn’t come close to solving the department store chain’s problems. For investors, it offers lessons beyond itself.

  • How to Pay Estimated Taxes

    Submitted by Jim Blankenship on Mon, 04/22/2013 - 12:00pm

    Tax season is over with April 15 behind us, but it isn’t really. If you have income that an employer does not withhold on your paycheck, it’s wise to make quarterly payments based on estimates of this revenue. Here’s a guide.

    The important take-away: When you have income from sources other than traditional employment, you must make estimated tax payments to the Internal Revenue Service throughout the year to avoid a massive tax bill and penalties next April.

  • New Threat to Social Security

    Submitted by Matthew Illian on Mon, 04/22/2013 - 9:00am

    It gets harder to live off a Social Security paycheck every year, due to under-reporting of inflation. A proposed revamp of inflation adjustments to benefits is sure to make the situation even worse.

    To save the government about $130 billion over a decade, President Barack Obama wants to reduce Social Security's cost-of-living adjustments (COLAs). This is clearly bad news for retirees who depend on Social Security payments.

  • Dealing With Doomsday

    Submitted by Bert Whitehead ... on Fri, 04/19/2013 - 3:00pm

    Forecasts of economic catastrophe crop up all the time, and especially lately. Don’t buy into them. While we do confront real problems, like government overspending and potential dollar debasement, the solution isn’t to exit the markets out of fear. Remember that a smart, diversified portfolio triumphs in the long run.

  • Don’t Sweat Small Spending

    Submitted by Michael Kitces on Fri, 04/19/2013 - 12:00pm

    Too often, consumers dig themselves a tremendous spending hole with big purchases, and then worry about the small stuff to make up the difference. If you really want to change your financial reality for the better, focus on it's the big stuff, namely where you live and what you drive. 

  • The Market-Economy Disconnect

    Submitted by Walid L Petiri on Fri, 04/19/2013 - 9:00am

    The conventional wisdom that the stock market is an indicator of the economy’s direction is not valid this time. Especially after this winter’s broad stock rally, it is obvious that stock performance is divorced from economic growth. On the contrary, investors should have a strategy prepared for a potential economic downturn.

  • Trading Amid a Data Storm

    Submitted by Joseph A. Clark on Thu, 04/18/2013 - 3:00pm

    How should you invest in a digital age of instant, if not always reliable, information? Especially when rapid-fire trading dominates the market. Answer: Stay informed, yet don’t over-react to the latest development and trade in a frenzy.

  • Socially Conscious Screening

    Submitted by Dan Crimmins on Thu, 04/18/2013 - 12:00pm

    Socially responsible investing considers both financial return and social good. Many investors object to various businesses activities, and there are money managers and funds that let them invest according to their consciences. But just how do they go about screening out objectionable things?

    This investing strategy has early roots in this country and dates back to 1758, when the Quakers refused to invest in any aspect of the slave trade. And while many groups followed SRI through the years, funds that employ a socially responsible screen are only a recent development.

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SMART ADVICE

 

A Tragic Mistake: ‘I Don’t Need Help Handling my Money’

 

By Larry Light, Editor-in-Chief

May 1, 2013

 

We all like to think we’re smart and self-sufficient. A lot of folks believe they can manage their financial lives by themselves. These do-it-yourselfers are woefully wrong.

 

AdviceIQ is about giving the world the wisdom of smart, honest (none can have any regulatory infractions) advisors. Are we blindly pro-advisor? No, we are clear-eyed about being pro-good advisor. Everyone, even the financial cognoscenti, should have such a helper to sort out life’s perplexities.

 

Lamentably, the financial crisis and the Bernard Madoff scandal convinced many to steer clear of advisors. According to a Deloitte consulting firm study, 57% of those polled say they’re more comfortable handling their retirement planning on their own. Plus, 38% contend they need no professional advice to plan.

 

Really? A story from Paul Sullivan shows how wrong-headed they are. Sullivan is enormously well-versed in personal finance, which he writes about for the New York Times. But it turns out that even he could use some help with his portfolio. One day he went before Tiger 21, an investment club of very wealthy (with at least $10 million in net worth) types who assessed his financial situation. To Sullivan’s surprise and dismay, the group found major holes: He and his wife didn’t have enough insurance, they carried an unneeded vacation home and spent too much.

 

The blasé DIY attitude vexes Edmond Walters, founder and chief executive of eMoney Advisor, which provides support services to advisors. He watches discount broker TV ads that promise you can direct your investments by yourself, without paying an advisor. “It’s dangerous,” he says. “The ads say you can come home after work and spend a couple of hours trading a month. But the professionals have a lot more information than you.” Result: You get slammed.

 

As the Times’ Sullivan attests, it’s good to have a more knowledgeable someone guiding you, an expert who keeps up with all the arcane changes in the financial arena. Do you know how much disability coverage you need? Are you saving adequately for your kids’ education? How much money are you wasting for no good reason? Will your investments support you through your retirement?

 

Walters spent almost two decades as an advisor before he started his current company. “But,” he says, “even I have an advisor.”

 

 

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